Minimizing risk is lucrative. The better the experience, the more members of the ecosystem will know when and how to interact in ways that can improve their lives. Balancing the two outcomes drives the insurance experience. This article explores the art of the possible when considering the administration, development, and management of the growth and prosperity of the insurance industry using APIs in the current landscape.
Art of the Possible with APIs
If you unbundle current products when markets change to then rebuild and redesign them, that is one way to improve the experience better. For example, say you create:
- Parametric Products based on public information such as flight information to trigger the policy as a smart contract and no need for traditional claims
Byproducts of unbundling products could result in:
- Faster information collecting
- Optimizing claim processing
- A better experience such as not having to give authorization to information multiple times within a session
Fouad Husseini, founder of the Open Insurance Initiative, and I discussed how using actuarial science, data science, parametric, AI and ML-based, IoT data to minimize risk help you segment out how you approach existing insurance products and build a better experience around them. For example, many consumer insurance sectors are now offering many monitoring devices in the insured parties’ context such as their car to learn driving habits or in the health insurance sector, incentivizing preventative health and customer acquisition through fitness device to track activity.
Product sets the direction and breaks down the experience into a vision, strategy, epics, features and stories in an agile environment. Engineering implements the experience through API Design and building working minimum demos so that product leadership can show prospects, customers, investors, partners and stakeholders to turn around real feedback for a life-changing experience. We will share lessons from other great product experiences and apply them to the insurance experience. For example, viewing all the benefits and risks that come from subscription, platform and community-based models, you can learn how to protect the insurance experience, keep it accurate, timely and maximize resources in the insurance ecosystem.
Ruby Raley, Vice President at Axway and expert in both healthcare and insurance advises, “API-First thinking is not delivering new integration technology. It is about ensuring that every component is built with the future in mind and that components can be rapidly discovered and prototyped to validate that our planned experiences are truly those that our consumers value.” She explains that for healthcare, one challenge is a good experience—whether for plan adjudicators or members (customers) requires collaboration. A plan does not hold all the information the way a bank might serve a member or patient. APIs can reduce the friction to connect an ecosystem to power new interactions and services.
Consumers of certain types of insurance experience digital concierge services available 24/7. The continuity of care of their insurance experience is just like their managed care experience of health records across vendors being normalized and accessible, secure and easy to understand.
The concept of continuity of care spills back into the API Design. Let’s dig deeper into what that looks like:
Signs of a well-designed insurance API
- Everyone on the API development team from product manager to developer can answer what the API does and why.
- Onboarding, time to value, documentation and self-service trial to production paths are available and well thought out for vetted parties to consume easily the API.
- When you experience the API as a patient and/or member, the experience is timely, accurate and relevant.
Consider the value of the API
Some providers don’t compete on price, but they do focus on quality — this approach is difficult for a premium product since customers think of insurance providers like they think of an electricity vendor, what differentiates your offering? The thoughtful consumer considers ways to understand whether or not he or she has enough coverage? The numbers don’t often reflect the quality of the coverage.
Mergers and acquisitions boost and diversify what insurance companies can offer. However, the shifts in leadership and resolving multiple sets of tools can be daunting.
The approach of each provider reveals how much each organization and their leaders believe in the power of APIs, focusing especially on the design phase where the most value and savings are extracted.
Having the foresight to abandon Conway’s law for one second to future proof and abstract your API design from back-end systems is where you begin to mature digitally, layer by layer, and have the Outside In and API Consumer view FIRST. The tendency has been resorting to just thinking of being the API Provider. For more details about the framework for API Value Propositioning are found here.
Even aggregators are understanding the power of APIs in Action such as GoodRx. Companies with (a) developer portal(s) and/or GitHub demonstrate that they want their APIs to be discoverable. And if these tools aren’t available or open, the company must provide a way to publish, discover, measure and innovate internally.
Insurance companies who use an API approach will exponentially see the value of delivering insurance as a service via platforms and to meet who they serve where they want to be served. Insurance companies who aren’t using APIs to empower vendors and ecosystems will have difficulty scaling and offering efficient options.
API Design Reduces Complexity
This article by Oscar Health details how complex 11 steps of claims processing can be viewed to help consumers understand why it can take a while such as for medical billing experts to decode the mystery. Programmatically, it can also be complex to orchestrate. Oscar Health’s Thorsten Wirkes explains that accuracy, timeliness and cost-efficiency are the core goals of a good claims processing experience. When a patient insured by Oscar interacts with the platform, digital concierge connects conversations, transactions and resources so that ideally the member goes to one spot to organize his or her care.
Digital natives fall in love with the experience and those used to going to their post office box, email, text and various other channels just search in one place. Oscar Health truly focuses on clean, modern continuously innovated design, happy employees who deliver great experiences and empathy, and rewards users and good behavior with a nice native and cross-platform experience through gamification. Foresight into the APIs that power the Oscar platform shielded the consumer or end-user from the claims processing noise.
Open innovation in insurance through APIs and Design
Recently, I contributed to The OPIN initiative, a collective global effort to enable a framework and ecosystem for financial service institutions to harness hundreds of years of insurance expertise with cutting-edge technology. In the world of insurance, and business, in general, faster processing of diverse data translates into better service, more insight, and faster tailoring of offerings to move investments and assets.
Today’s experience would mature faster if we can pull in certain types of information and provide information to and from decentralized systems. One issue that companies face today is not having APIs and dealing with fragmented and legacy systems. What if we could seamlessly and securely combine this kind of relevant information as open data which requires that they are built as APIs?
A disruptive concept has already hit the design world with Lemonade. Many other insurance types are becoming available in this way since there is less risk involved and a faster subscription-based model with lower churn.
- Easier to transact: The easier it is to use and understand the policy, the more the right type of coverage is properly used and more satisfaction can be achieved for all stakeholders.
- Easier switching: However, providers keep users on their policy, platform, offering by delivering a constant value which makes the user less likely to switch.
- Wide varieties: In recent years, many kinds of insurance options appear to attract businesses, professionals, and consumers.
Innovate existing workflows
Any kind of self-reported information would be validated initially and along various checkpoints to more quickly prevent fraud. Currently, there is too much room for human error and not enough automatic processing of textual, visual, and other identity verification such as a multi-factor authentication through integration from APIs that already do this very well and would be part of your existing architecture to scale together. From a trusted perspective, the API service provider must have the API consumer’s wish for enterprise-grade confidence even if the size of the API service provider is a new InsurTech organization.
You can start to show results by merging steps in claims processing. For example, using Artificial Intelligence, Machine Learning and, IoT and other on the ground information, distills the data for strategic action so that as an API service provider, you help insurance providers and ecosystem players be proactive rather than reactive. Help them create more powerful ways to meet business and consumer demands.
The medical adherence demo Leor Brenman of the Griffin Innovation Lab built to illustrate how a Healthcare Provider reduces cost and improves their patient’s health by implementing a medication adherence system that serves several personas, use cases and interfaces.
Use concepts such as stunning design (not just the UI, but the entire experience with your insurance offerings) to captivate and keep customers, providers, and insurance ecosystem partners. The total product experience, when you approach it with a thoughtful design, absolutely results in better care. Some information you need will be in the cloud, some must never touch the cloud.
Hybrid integration and APIs are foundational to an open insurance framework:
- Security is paramount
- Some of the data must remain on-premise
- Some of the data can be in a cloud (public, private)
Open insurance initiatives have clear advantages to succeed through faster innovation by learning from the business wins of open banking and FinTech. Complexities aside, here are ways that open insurance sets us up to have visible proof points and sample data for long-term total product experience agility by addressing accessibility, security, and ease of use. In addition, we are building the ability to use open initiatives to navigate platform performance to change market share positioning.
Core Insurance Capabilities vs. Innovative Capabilities
Politicians in the EU set forth strict compliance targets setting banks on a path to figure out ways to quickly adapt. FinTech was looking to disrupt the total banking experience setting up a perfect storm that also saw a surge in alternative digital currencies and investments in these new constructs. Though open insurance is a voluntary movement, and some would argue far more complex in the United States, we have the global added advantage of learning from the boom in open banking. Just as new cryptocurrency and smart contract-based business models emerged and received a surge in funding from investors in 2017 promising that they would learn from the issues of Bitcoin and Ethereum, so the open insurance initiative includes shortcuts to disruption without the added constraints of open banking.
The role of APIs in open insurance
- Insurance as a whole is a lot larger in terms of assets than banking.
- Managing data and security risk
- Compensate with digital currencies
- Ways to visualize data
Experiences must be designed with care. Every detail matters, even behind the scenes data and APIs. Businesses and consumers can feel the difference when the quality, interaction and results are built to delight them. Focusing on Open APIs as a framework, an Outside In API Consumer First approach, and continuity of care that is both digital and analog are key to designing insurance experiences that are API driven.
Insurance providers are quickly understanding that they’re technology providers since that is one of the main conduits to providing great insurance products. The proportion of resources including talent, technology, and leadership that an organization or company invested in its API program, developer experience, and hybrid integration plus API strategy directly relates to the provider’s brand recognition and leadership position in the insurance ecosystem they represent.
Read the Adoption is in the Celent Report API Technology: Enabling Digital Insurance.